A+H Cross Listing Of Banks,Stock Price Informativeness And Company Value

Although a large portion of China's cross-listed firms are commercial banks,most research on firms' cross listing in China exclude from their samples China's commercial banks on the ground that the performance parameters measuring commercial banks are largely divergent from those measuring firms in other industries.Our study of cross listing behaviors of China's commercial banks finds its theoretical foundation by filling this gap in the current literature.On the other hand,those A+H cross listed commercial banks dominates the banking industr y;decide the direction of the reformation and development path of the capital market;and play a key role in measuring the healthy state and development level of the China economy.Research focusing on A+H listed commercial banks not only provides insights on China's banking industry which is currently experiencing reformation and reconstruction,but also serves as a reference for carrying out the interest rate marketization and step-by-step opening of the capital market.Therefore,in addition to the theoretical considerations,study on the cross listing of China's commercial banks also has significant practical importance.This paper builds a balanced panel data model based on data from 9 commercial banks that are A+H listed and 7 commercial banks that are only A listed from year 2010 to 2015.We estimate the relationship between the firm values and informativeness of those banks and the A+H listing behavior.Our estimation result indicates that(1)A+H listing reduces the firm values of the listed commercial banks instead of enhancing them.(2)There is signific a nt negative correlation between the informativeness of all the listed commercial banks and their firm values.(3)A+H listing has no significant impact on the informativeness of the listed commercial banks,showing that information asymmetry is not weakened by A+H listing due to the isolation between the A-share and H-share markets.This paper also qualitatively analyze and compare the profitability,risk exposure and liquidity between the two groups of A+H and A listed commercial banks.The results further reinforce our previous finding that A+H listing is negatively correlated to the values and performance of the listed commercial banks.We conclude that in the commercial banking industry,A+H listing does not play a positive role on the firm values.This could probably be attributed to the segmentation,il iquidity and policy influenced nature of China's capital market.